Are We In The Radio Or Entertainment Business?

The following is an article by guest blogger Robert Maccini.

It continues to amaze me that some in the radio industry have not embraced digital. Terrestrial radio is a distribution system. Broadcasters have years of experience developing great content. One can argue that this content has been homogenized in recent years but I believe we still have the ability to attract listeners as evidenced by 92% of the population using radio on a weekly basis. Why would any broadcaster shun streaming their station and developing an effective sales strategy?

Maccini PhotoOne cannot fight technology and a new two way communication system is here and quickly gaining ground, IP delivered audio and video content.  Advertisers crave being able to more effectively and efficiently communicate with their target audience.

Streaming audio has the ability to not only know where a listener is located but also their age, sex and other qualitative information. Currently this new distribution system lacks full mobility but the coming advent of web browsers in new cars is going to quickly cure this limitation.  Coupling that with the advent of 4G cell networks and WiMax results in the listening experience being as good as terrestrial radio including where bitrates are higher – HD radio.  I could rant on about the millions of dollars wasted by the radio industry on this antiquated one way entertainment system… but I think this last sentence sums it up.

In these difficult economic times it becomes increasingly harder to contemplate investing money to develop this new distribution system for radio when expense line items are being scrutinized right down to the station copier lease.  A common refrain is, “Am I just cannibalizing my existing revenue?”  While in some cases this may be true, not providing content for this new distribution system puts stations in the position of not being able to fulfill advertiser demands and ceding this to a competitor.

The Internet radio industry is in the first inning and currently represents less than 5% of most radio station revenue.  However, this is one slice of the advertising pie that is growing. I believe with an economic recovery (no prediction of when this will occur) ad dollars will continue to flow to digital at a greater rate.

In the end terrestrial radio stations will be one of thousands of listener options. The only elements that can set terrestrial radio delivered via IP apart are the quality of content including local news/information, personalities and unique approaches to this new medium. We are not in the radio business.

Robert J. Maccini is the CEO of Ando Media, LLC the leading provider of audience measurement and ad insertion technology for the Internet radio industry. You can learn more about Ando Media at www.andomedia.com

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